New Delhi, Nov 30, : .India’s Q2FY22 GDP grew by 8.4% year-on-year due to higher central fiscal spending and consumption recovery. The uptrend was supported by pent-up demand, higher imports, and a rise of service activity, which is further supported by an improvement in mobility.
This YoY rise was also due to the accelerated vaccination drive, which brightened consumer sentiments.
India’s GDP growth rate YoY had declined by 7.4% in the same period as the previous fiscal.Sequentially, India’s GDP growth rate in Q2FY22 was lower that the 20.1 percent increase recorded for Q1FY22.India’s GDP at constant 2011-12 price was Rs 35.73 lakh crore in Q2FY22 as compared to Rs 32.97 crore crore in Q2FY21.
“GDP at Constant (2011-12), Prices in Q2 2021-22 was estimated at Rs 35.73 crore, as opposed to Rs 32.97 crore in Q2 2020-21 showing a growth rate of 8.4 percent as compared with 7.4 percent contraction in Q2 2020-21,” National Statistical Office (NSO), stated in its Q2FY22 GDP estimations.
It also stated that Quarterly GVA at Constant Prices (2011-12) Prices in Q2 2021-22 was Rs 32.89 crore, compared to Rs 30.32 crore in Q2 2020-21, which shows an 8.5% growth.
The GVA does not include subsidies, but includes taxes.
IANS polled economists on November 29 to predict that India’s GDP Q2FY22 will grow anywhere from 7 to 9 percent based on consumption recovery.
Year-on-year, there was a sharp rise in spending on public administration, defense and other services.This was an increase of 17.4% from (-)9.2% in the quarter before the previous fiscal, and 5.8% in Q1FY22.
The Q2GVA of 2021-22 in the agriculture, fishing, and forestry sector saw a growth rate of 4.5 percent, compared to 3% in the quarter 2020-21 and 4.5 percent in Q1FY22.
Similar to the Q1FY22, the GVA from the manufacturing sector grew 5.5%, compared with a de-growth (-)1.5% in the same quarter of the previous fiscal, and 49.6% in Q1FY22.
The mining and quarrying industry grew by 15.4%, compared to the previous fiscal’s contraction (-)6.5% and 18.6% in Q1FY22.
“This was mainly due the sharp increase in public spending in the second quarter after conserving spending in the first quarter as seen in the increase of 8.5 percent in government consumption expenditures,” stated M.Govinda Rao Chief Economic Adviser at Brickwork Ratings.
Suman Chowdhury is the Chief Analytical Officer at Acuite Ratings & Research.He stated that there was a 10.7 percent increase in gross capital formation.This is primarily driven by public capital expenditure, but there are also signs of a rise in private capex.
“The absolute GDP value has increased by 0.33 percent from Q2FY20’s pre-pandemic levels.”
Sunil Kumar Sinha (Principal Economist, India Ratings and Research): “While the base effect is primarily responsible for the healthy GDP growth numbers, it still indicates that the economy is recovering quickly after Covid 2.0.”
“In fact, 2QFY22 GDP is now in level terms higher than 2QFY20.It is only 0.3% higher than 2QFY20, but it does indicate that the economy has finally recovered some ground lost due to the Covid-19 pandemic.
Aditi Nayar (ICRA Chief Economist) stated that the pace of GVA growth in Q2 FY2022 modestly exceeded expectations.
This was primarily due to agriculture, forestry, fishing, and public management and other services.
“After a generally healthy festive season, many indicators have shown a flagging momentum November 2021, which suggests that the revival of economic growth is still not sustainable.”
“While increasing vaccine coverage and fuel tax reductions will boost confidence, and re-invigorate the demand, the spectre that higher prices could limit the consumption recovery for H2 FY2022”
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